No. 99-1786 

In the Supreme Court of the United States 

GREAT-WEST LIFE & ANNUITY INSURANCE 
COMPANY, ET AL., PETITIONERS 

v. 

JANETTE KNUDSON AND ERIC KNUDSON 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

BRIEF FOR THE UNITED STATES 
AS AMICUS CURIAE SUPPORTING PETITIONERS 

JUDITH E. KRAMER 

Acting Solicitor of Labor 
ALLEN H. FELDMAN 

Associate Solicitor 
NATHANIEL L. SPILLER 

Deputy Assistant Solicitor 
GARY K. STEARMAN 

Attorney 
Department of Labor 
Washington, D.C. 20210 

BARBARA D. UNDERWOOD 

Acting Solicitor General 

Counsel of Record 
EDWIN S. KNEEDLER 

Deputy Solicitor General 
BETH S. BRINKMANN 

Assistant to the Solicitor 

General 
Department of Justice 
Washington, D.C. 20530-0001 
(202) 514–2217 

QUESTION PRESENTED 

Whether a civil action brought under Section 502(a)(3) of 
the Employee Retirement Income Security Act of 1974, 
29 U.S.C. 1132(a)(3), to redress a violation of, or to enforce, a 
term of a plan that requires a plan participant or beneficiary 
to reimburse the plan for medical expenses paid by the plan 
if the participant or beneficiary receives a recovery from a 
third-party tortfeasor, constitutes an action for “appropriate 
equitable relief ” authorized by Section 502(a)(3). 

(I) 

TABLE OF CONTENTS 

Page 

Interests of the United States .................................................... 
1 

Statement ........................................................................................ 2 

Summary of argument .................................................................. 

10 

Argument: 

An action may be brought under Section 502(a)(3) 
of ERISA to enforce or redress a violation of an 

ERISA plan term that requires a participant or 
beneficiary to reimburse the plan for medical ex- 
penses recovered from a third party ................................. 

12 

A. A suit to enforce a reimbursement term of 
an ERISA plan constitutes an action for appro- 
priate equitable relief, not money damages, 

because it seeks to prevent unjust enrichment ....... 

14 

B. “Equitable relief ” includes an order to prevent 
unjust enrichment resulting from a participant’s 

or beneficiary’s failure to abide by a reimburse- 
ment term of an ERISA plan ..................................... 
19 

C. The absence of wrongdoing by respondents in 

the initial receipt of benefits does not foreclose 
equitable relief to require reimbursement ............... 

27 
Conclusion ....................................................................................... 30 

TABLE OF AUTHORITIES 

Cases: 

Administrative Comm. v. Gauf, 188 F.3d 767 (7th Cir. 
1999) ......................................................................................... 21 

Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) ...... 

20 

Blue Cross & Blue Shield v. Sanders, 138 F.3d 
1347 (11th Cir. 1998) .......................................................... 
10, 26 

Bowen v. Massachusetts, 487 U.S. 879 (1988) .................. 19 

(III) 

IV 

Cases—Continued: Page 

Cement Masons Health & Welfare Trust Fund v. 

Stone, 197 F.3d 1003 (9th Cir. 1999), petition for 
cert. pending, No. 99-1403 ...................... 

8, 9, 10, 13, 14, 27, 28 

Chauffeurs Local No. 391 v. Terry, 494 U.S. 558 
(1990) .................................................................................... 
16, 19 

Curtis v. Loether, 415 U.S. 189 (1974) ................................ 
19 

Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 
(1995) ........................................................................................ 3 

Department of the Army v. Blue Fox, Inc., 
525 U.S. 255 (1999) ............................................................ 

19, 24 

Egelhoff v. Egelhoff, 121 S. Ct. 1322 (2001) ...................... 
20 

FMC Corp v. Holliday, 498 U.S. 52 (1990) ................... 
20, 25 

FMC Med. Plan v. Owens, 122 F.3d 1258 (9th 

Cir. 1997) ............................................. 
8, 9, 10, 13, 14, 15, 27, 28 

Firestone Tire & Rubber Co. v. Bruch, 
489 U.S. 101 (1989) ................................................................ 

17 
Harris Trust & Sav. Bank v. Salomon Smith 

Barney Inc., 530 U.S. 238 (2000) .................................... 

10, 12, 

17, 19, 22, 24, 28, 29 
Harris Trust & Sav. Bank v. Provident Life & 

Accident Ins. Co., 57 F.3d 608 (7th Cir. 1995) ................. 
23 

Health Cost Controls of Ill., Inc. v. Washington, 
187 F.3d 703 (7th Cir. 1999), cert. denied, 
528 U.S. 1136 (2000) ............................................... 
12, 22, 24, 29 

Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 
(1999) .................................................................................... 
10, 17 

Martin v. Wilks, 490 U.S. 755 (1989) ................................. 
7 

Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) ............ 
8, 11, 

12, 13, 19, 28 
Moore v. Crawford, 130 U.S. 122 (1889) ............................ 

23 

Porter v. Warner Holding Co., 328 U.S. 395 (1946) .... 
19, 22 

Provident Life & Accident Ins. Co. v. Waller, 
906 F.2d 985 (4th Cir.), cert. denied, 
498 U.S. 982 (1990) ................................................................ 
23 

Raton Water Works Co. v. Raton, 174 U.S. 360 
(1899) ........................................................................................ 26 

V 

Cases—Continued: Page 

Reich v. Continental Cas. Co., 33 F.3d 754 (7th 

Cir. 1994), cert. denied, 513 U.S. 1152 (1995) ................... 
22 

Reynolds Metals Co. v. Ellis, 202 F.3d 1246 (9th 

Cir.), cert. dismissed, 121 S. Ct. 674 (2000) ................. 

8, 10, 27 

Stillmunkes v. Hy-Vee Employee Benefit Plan & 

Trust, 127 F.3d 767 (8th Cir. 1997) .................................... 

25 

Tull v. United States, 481 U.S. 412 (1987) .............. 
15, 19, 22 

Varity Corp. v. Howe, 516 U.S. 489 (1996) .................... 
19, 21 

Wal-Mart Stores, Inc. Assocs.’ Health & Welfare 

Plan v. Wells, 213 F.3d 398 (7th Cir.), cert. 
denied, 121 S. Ct. 441 (2000) ................................................ 

29 

Statutes and regulation: 

Administrative Procedure Act, 5 U.S.C. 702 .................. 

19, 20 

Employee Retirement Income Security Act of 1974, 
29 U.S.C. 1001 et seq. ............................................................. 
2 

Tit. 1, 29 U.S.C. 1001-1169 (1994 & Supp. V 1999) ... 
1, 2, 22 

§ 2(b), 29 U.S.C. 1001(b) ................................................... 
21 

§ 3(21)(A), 29 U.S.C. 1002(21)(A) ................................... 
12 

§ 101(a)(1), 29 U.S.C. 1021(a)(1) ..................................... 
3 

§ 102(a)(1), 29 U.S.C. 1022(a)(1) (1994 & 

Supp. V 1999) ............................................................... 

3 

§ 201(1), 29 U.S.C. 1081(a)(1) .......................................... 
17 

§ 502(a)(1)(B), 29 U.S.C. 1132(a)(1)(B) .......................... 
7 

§ 502(a)(3), 29 U.S.C. 1132(a)(3) ............................... 
passim 

§ 503(a)(5), 29 U.S.C. 1132(a)(5) ............................. 
2, 11, 28 

§ 502(e)(1), 29 U.S.C. 1132(e)(1) ..................................... 
7 

§ 514(a), 29 U.S.C. 1144(a) ............................................... 
21 

28 U.S.C. 1441 ............................................................................ 
5 

29 C.F.R. 2510.3-102 ................................................................. 
17 

Miscellaneous: 

G. Bogert & G. Bogert, The Law of Trusts and 

Trustees (rev. 2d ed.): 
1978 ...................................................................................... 27 

1979 .................................................................................. 

17, 18 

1984 ............................................................................ 16, 24, 25 

VI 

Miscellaneous—Continued: Page 

1 D. Dobbs, Law of Remedies (2d ed. 1993) ..................... 
15, 22, 

24, 25, 28, 29 
C. Kaufmann, Corbin on Contracts (Supp. 1989) ............... 

23 

4 J. Pomeroy, Equity Jurisprudence (5th ed. 1941) ....... 
23-24, 

26, 27 

Private Health Insurance—Impact of Premium In- 
creases on Number of Covered Individuals Is Un- 
certain: Hearings Before the Subcomm. on 
Employer-Employee Relations of the House Comm. 
on Education and the Workforce, 106th Cong., 
1st Sess. (1999) ....................................................................... 
16 
Restatement of Restitution (1937) ................. 
14, 22, 24, 25, 29 

Restatement (Second) of Contracts (1981) ................ 
26, 27, 28 

Restatement (Second) of Trusts (1959) .................................. 
18 

16 L. Russ, Couch on Insurance (3d ed. 2000) ................ 
21, 25 

S. Rep. No. 383, 93d Cong., 1st Sess. (1973) ......................... 
24 

5 A. Scott & W. Fratcher, Scott on Trusts (4th ed. 
1989 & Supp. 2000) ............................................................ 
28, 29 

3A A. Scott & W. Fratcher, The Law of Trusts 
(4th ed. 1988) .......................................................................... 
18 

1 J. Story, Equity Jurisprudence (14th ed. 1918) ............... 20 

In the Supreme Court of the United States 

No. 99-1786 
GREAT-WEST LIFE & ANNUITY INSURANCE 
COMPANY, ET AL., PETITIONERS 

v. 
JANETTE KNUDSON AND ERIC KNUDSON 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

BRIEF FOR THE UNITED STATES 
AS AMICUS CURIAE SUPPORTING PETITIONERS 

INTERESTS OF THE UNITED STATES 

Section 502(a)(3) of the Employee Retirement Income 
Security Act of 1974 (ERISA), 29 U.S.C. 1132(a)(3), author- 
izes an ERISA plan participant, beneficiary, or fiduciary to 
bring a civil action to obtain “appropriate equitable relief ” to 
redress violations of, and to enforce, both the terms of the 
plan and Title I of ERISA, 29 U.S.C. 1101-1169 (1994 & 
Supp. V 1999). This suit was filed by an employee benefit 
plan, its administrator (as a fiduciary of the plan), and its 
insurer to enforce a term of the plan that requires a partici- 
pant or beneficiary to reimburse the plan for medical ex- 
penses out of any funds recovered by the participant or 
beneficiary from a third-party tortfeasor. The question 
presented is whether the relief sought by the plan to obtain 
reimbursement constitutes equitable relief within the 
meaning of Section 502(a)(3). 

(1) 

2 

The Secretary of Labor is authorized under Section 
502(a)(5) of ERISA, 29 U.S.C. 1132(a)(5), to bring civil 
actions to obtain “appropriate equitable relief ” to redress 
violations of, and to enforce, Title I of ERISA. Accordingly, 
the Court’s determination of what constitutes “appropriate 
equitable relief ” may affect not only the scope of private civil 
actions under Section 502(a)(3) to enforce Title I, which are a 
necessary complement to actions by the Secretary, but also 
the scope of the Secretary’s own authority to enforce Title I 
of ERISA. 

STATEMENT 

1. Petitioner Health and Welfare Plan for Employees 
and Dependents of Earth Systems, Inc. (the plan), is a medi- 
cal and hospital benefits plan that qualifies as an employee 
welfare benefit plan subject to the Employee Retirement 
Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. 
Pet. App. A2, C2. Petitioner Earth Systems, Inc. (Earth 
Systems), is the sponsor and administrator of the plan. J.A. 
24-25, 89. Petitioner Great-West Life & Annuity Insurance 
Company (Great-West) is the stop-loss insurer for the plan 
and the assignee of the plan for purposes of obtaining 
reimbursement. Pet. App. A2, C2.1 
Respondent Janette Knudson was seriously injured in an 
automobile accident on June 10, 1992. Pet. App. A2. At the 
time of the accident, she was covered by the plan as an 
eligible dependent because she was the spouse of respondent 
Eric Knudson, who was an employee of a wholly-owned 

1 The district court explained that “[t]he Plan had a ‘Stop-Loss’ insur- 
ance agreement with Great-West, whereby the Plan would pay any 
benefits up to $75,000 and Great-West would pay any excess amount. 
Additionally, the stop-loss allowed Great-West the right to recover first 
from amounts paid to the Plan by third parties. The stop-loss limits the 
Plan’s risk of dissipating all of its assets for a single member.” Pet. App. 
C2. 

3 

subsidiary of petitioner Earth Systems and a participant in 
the plan. Id. at A2, C2. 

2. The summary plan description (SPD) for the plan2 
provided that, in the event a “third party may be liable or 
legally responsible for expenses incurred by a Covered 
Person for: an illness; or a sickness; or a bodily injury,” the 
plan would pay the covered expenses, but would “have the 
right to recover from the Covered Person any payment for 
benefits paid for treatment of such [l]oss * * * which the 
Covered Person is entitled to receive from the third party.” 
J.A. 58. The SPD further provided that the plan would 
“have a first lien upon any recovery, whether by settlement, 
judgment or otherwise, that the Covered Person receives” 
from the third party or the third party’s insurer. Ibid. The 
lien was not to exceed “the amount of benefits paid” by the 
plan for the medical treatment or “the amount received by 
the Covered Person for such medical treatment from the 
third party.” J.A. 59. The SPD also set forth certain 
conditions pertaining to the plan’s right of recovery. First, it 
stated that the covered person must “cooperate fully” with 
the plan in asserting its right to recover. Ibid. Second, the 
SPD specified that, if the covered person received a recov- 
ery from a third party but failed to reimburse the plan, the 
person would be personally liable to the extent of the 
recovery from the third party up to the amount of the plan’s 

2 Pursuant to Sections 101(a)(1) and 102(a)(1) of ERISA, 29 U.S.C. 
1021(a)(1) and 1022(a)(1) (1994 & Supp. V 1999), a SPD must be furnished 
to all participants and beneficiaries of the plan. It must include specific 
information about the plan, including eligibility requirements and 
procedures for claim submissions. 29 U.S.C. 1022(a)(1) (1994 & Supp. V 
1999). It must be “written in a manner calculated to be understood by the 
average plan participant” and “must be sufficiently accurate and compre- 
hensive to reasonably apprise such participants and beneficiaries of their 
rights and obligations under the plan.” 29 U.S.C. 1022(a)(1) (1994 & Supp. 
V 1999). See Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83-84 
(1995). 

4 

first lien. Ibid. Third, the SPD provided that, before the 
plan paid for treatment, it “may require the Covered Person 
to provide all information and sign and return all documents 
necessary to exercise [its] rights [of recovery] under this 
provision.” Ibid. 

Pursuant to those terms of the plan, petitioner Great- 
West, on behalf of the plan, notified respondent Eric 
Knudson on August 19, 1992, of the plan’s entitlement to full 
reimbursement for any expenses paid on Janette Knudson’s 
behalf, if any settlement or judgment was received from a 
court. J.A. 71-72. On September 30, 1992, Great-West wrote 
a similar letter to Janette Knudson. J.A. 75-76. Great-West 
explained that it was investigating the plan’s possibilities for 
recovering from third parties, and it informed Janette 
Knudson of the plan’s first lien right of recovery to any sums 
she received in settlement or in satisfaction of a judgment as 
a result of the accident. J.A. 75. Great-West also requested, 
in conformity with the plan, that she sign a right-of-recovery 
agreement. J.A. 75-76. Great-West’s letter stated that any 
attorney representing Knudson should be given the cor- 
respondence and that any “[s]ettlement of this matter in 
contravention” of the terms in the letter “does not extin- 
guish the Plan’s rights in this matter or reduce its legal 
options.” J.A. 76. 

On October 20, 1992, respondent Eric Knudson signed the 
right-of-recovery agreement. See J.A. 77-78. In that agree- 
ment, he acknowledged that as a participant in the plan he 
had made a claim for covered medical benefits for his wife’s 
injuries, and he requested that benefits be paid by the plan 
at that time “without the necessity of awaiting final deter- 
mination of responsibility and with the understanding that 
no benefits may be payable and that another party or insurer 
may be liable for like benefits for which they will make 
payments.” J.A. 77. Eric Knudson also agreed that the plan 
may be subrogated to any rights he or his dependent may 

5 

have to benefits from the other party; agreed to transfer to 
the plan any right he or his dependents may have to take 
legal action against the other party; and acknowledged that, 
under the terms of the plan, the plan may obtain reimburse- 
ment from him of any payment of benefits for which he or his 
dependents may be entitled to recover from a third party. 
J.A. 77-78. Eric Knudson further acknowledged that the 
plan “shall automatically have a first lien upon any recovery, 
whether by settlement, judgment or otherwise”; that “[s]aid 
first lien shall be for the amount of medical and hospital 
benefits paid by the Plan”; and that he would be personally 
liable to the plan “to the extent of such recovery up to the 
amount of its first lien.” J.A. 78. Finally, Eric Knudson 
agreed “to cooperate fully with the Plan in asserting its 
rights to recover.” Ibid. 

The plan paid benefits on behalf of Janette Knudson in the 
form of medical expenses totaling $411,157.11. Pet. App. A2. 

3. In 1993, respondents filed suit in state court against 
the manufacturer of the automobile that Janette Knudson 
was driving when she was injured and against others alleg- 
edly responsible for the accident. Pet. App. A2, B1, C2. The 
parties ultimately settled the case for $650,000. By orders 
dated July 23, 1997, and August 1, 1997, the state court 
approved the settlement and resolved the status of various 
competing liens against the settlement. Id. at A2, C3-C4.3 
The settlement allocated five percent of the award, or 
$13,828.70, to past medical expenses. Id. at A2, C3. Respon- 

3 Respondents did not make petitioners parties to the suit in state 
court, Pet. App. B2, C2-C3, and petitioners did not attempt to intervene in 
that action, id. at C2. Nevertheless, on April 21, 1997, petitioners 
removed the state-court action to federal court before the settlement was 
approved by the state court. Id. at B2, C3. On June 27, 1997, the district 
court remanded the case to the state court. It held that because peti- 
tioners were not parties to the state-court action, they had no right of 
removal under 28 U.S.C. 1441. Pet. App. B1-B4, C3. 

6 

dents tendered a check in that amount to petitioners, who 
rejected the payment because in their view the plan was 
entitled to payment in full of the $411,157.11 in medical 
expenses that it had paid on behalf of respondents. Id. at 
A2-A3, C3-C4. Petitioners requested that respondents’ at- 
torney segregate the settlement funds pending the outcome 
of the instant suit in federal court, but respondents’ attorney 
declined because the monies had gone directly from the 
automobile manufacturer to a trust established for Janette 
Knudson. Id. at C4. 

4. a. Meanwhile, on May 19, 1997, petitioner Great-West 
had filed the instant action under Section 502(a)(3) of 
ERISA, 29 U.S.C. 1132(a)(3), to enforce the reimbursement 
provision of the plan through equitable and declaratory 
relief. J.A. 81-86. On July 3, 1997, Great-West, now joined 
by petitioners Earth Systems and the plan, filed a first 
amended complaint (see J.A. 87-95) requesting injunctive 
relief to prevent respondents from violating the plan by 
refusing to agree to reimburse it; to enforce the terms of the 
plan by requiring respondents to make reimbursement in the 
amount of $411,157.11 out of any proceeds recovered from 
third parties; and to prevent respondents from disposing of 
any funds received pursuant to a settlement because respon- 
dents had failed to honor petitioners’ subrogation rights 
under the plan. J.A. 92-94. Petitioners also requested a 
declaration that respondents are required to reimburse the 
plan $411,157.11 out of any proceeds they recover from third 
parties, J.A. 93, a temporary restraining order to prevent 
respondents from seeking state-court approval of the 
settlement, ibid., and “any other relief to which [the plan] is 
entitled,” as well as attorney’s fees. 

J.A. 95.4 

4 On July 9, 1997, the district court denied petitioners’ request for a 
temporary restraining order. J.A. 96-99. 

7 

b. On May 14, 1998, the district court, ruling on cross- 
motions for summary judgment, entered judgment for re- 
spondents. Pet. App. C1-C12. The district court held that 
petitioners’ rights under the plan were limited to the portion 
of the state-court settlement that was attributed by the 
state court to past medical expenses. Id. at C10.5 The court 
rejected as arbitrary and capricious the plan administrator’s 
interpretation of the plan to allow petitioners to be “reim- 
bursed 100% of any third party recovery,” because the court 
interpreted the plan to limit reimbursement to the lesser of 
“the amount of benefits paid out” by the plan ($411,157.11) or 
“the amount received from a third party for medical 
treatment,” which the court understood here to be “the por- 
tion of the $650,000 [settlement] that is attributable to medi- 
cal expenses.” Id. at C9-C10.6 The court held that because 

5 The district court rejected petitioners’ argument that the state court 
lacked subject matter jurisdiction to determine the plan’s lien rights. Pet. 
App. C5-C7. The district court held that the state court had concurrent 
jurisdiction under Section 502(a)(1)(B) and (e)(1) of ERISA, 29 U.S.C. 
1132(a)(1)(B) and (e)(1), because “[t]he state court action to determine the 
status of liens on Janette Knudson’s recovery is an action to enforce her 
rights under the terms of the * * * Plan.” Pet. App. C6. If this Court 
reverses the court of appeals’ holding that petitioners have no cause of 
action under Section 502(a)(3) of ERISA, the court of appeals may 
consider on remand whether the district court correctly held that the state 
court had jurisdiction to determine the plan’s lien rights and whether 
petitioners could in any event be bound by the state court’s determination 
of that issue even though they were not parties to the state-court action. 
See Martin v. Wilks, 490 U.S. 755, 762 & n.2 (1989) (“A judgment or 
decree among parties to a lawsuit resolves issues as among them, but it 
does not conclude the rights of strangers to those proceedings,” except in 
certain limited circumstances.). 

6 The district court disregarded the right-of-recovery agreement 
signed by respondent Eric Knudson because, in the court’s view, that 
agreement misstated the terms and obligations of the plan, lacked consid- 
eration, and deviated from the plan without a formal plan amendment. 
Pet. App. C8-C9. In particular, the court noted that although the agree- 
ment extended reimbursement to “ ‘any’ third party recovery,” id. at C8, 

8 

the state court concluded that five percent of the settlement 
is attributed to petitioners’ lien, petitioners’ right of recov- 
ery in this action is limited to that amount. 

5. a. The court of appeals affirmed the district court’s 
judgment, but on different grounds. Pet. App. A2-A4. The 
court explained that Section 502(a)(3) of ERISA authorizes 
only an action for equitable relief, and that, in FMC Medical 
Plan v. Owens, 122 F.3d 1258 (9th Cir. 1997), it had held that 
“reimbursement of payments made to a beneficiary of an in- 
surance plan by a third party, which [petitioners] seek here, 
is not equitable relief within the meaning of § 1132(a)(3).” 
Pet. App. A3-A4.7 The court of appeals rejected petitioners’ 
argument that Owens was wrongly decided and declined 
petitioners’ request for en banc review, noting that it had 
recently reaffirmed the Owens holding in Reynolds Metals 
Co. v. Ellis, 202 F.3d 1246 (9th Cir.), cert. dismissed, 121 S. 
Ct. 674 (2000). Pet. App. A4. 

b. The Owens decision, which the panel in this case felt 
bound to follow, held that under Mertens v. Hewitt Associ- 
ates, 508 U.S. 248 (1993), the term “equitable relief ” must be 
given a “narrow construction” for purposes of Section 
502(a)(3) of ERISA, see 122 F.3d at 1262, and relief is limited 
to “injunction, mandamus, and restitution,” id. at 1260-1261. 
The Ninth Circuit concluded in Owens that the complaint in 
that case—which sought reimbursement out of a partici- 

the plan itself, in the court’s view, limited reimbursement to “the amount 
received from a third party for medical treatment,” id. at C10. 

7 The court noted that the Owens panel had ordered dismissal for lack 
of subject matter jurisdiction, while in Cement Masons Health & Welfare 
Trust Fund v. Stone, 197 F.3d 1003, 1008 (9th Cir. 1999), petition for cert. 
pending, No. 99-1403, the panel ordered dismissal of the same type of 
claim on the merits, Pet. App. A4—i.e., for failure to state a claim on which 
relief could be granted. For purposes of this case, the panel here noted, in 
evaluating the substantive holding of Owens, “the dismissal could be based 
either on lack of subject matter jurisdiction or on the merits.” Id. at A4 

n.5. 

9 

pant’s third-party recovery for benefits paid by the plan— 
did not purport to seek either an injunction or mandamus. 
The court also concluded that restitution was not available 
because, in its view, Mertens holds that restitution consists 
only of the return of “ill-gotten” assets or profits taken from 
a plan, id. at 1261, and the participant in Owens had obtained 
the payments from the plan pursuant to its terms, not by any 
fraud or wrongdoing. The court held that, under the 
construction of Section 502(a)(3) it believed was “mandated 
by Mertens,” a claim for reimbursement is not authorized in 
those circumstances. Id. at 1262. The court instead viewed 
the suit as a “breach of contract claim” in which the remedy 
sought was “money damages for [the participant’s] alleged 
breach,” and it held that such relief is not available under 
Section 502(a)(3). Id. at 1261-1262. 

For similar reasons, the Ninth Circuit in Owens rejected 
the contention that a constructive trust could be imposed. 
The court recognized that the Ninth Circuit had previously 
held that a constructive trust constitutes an equitable rem- 
edy under ERISA. But it held that remedy was unavailable 
in Owens because “a constructive trust is born from some 
form of ill-gotten gain of another’s property,” and the partici- 
pant in Owens had not obtained the payment of medical 
expenses from the plan “by any form of fraud, duress, or 
unconscionable behavior,” or as a result of any breach of 
fiduciary duty. 122 F.3d at 1261.8 

8 The Ninth Circuit reaffirmed the substantive holding of Owens in 
Cement Masons (see note 7, supra), holding that, like Owens, the case 
involved a claim for contractual reimbursement, and not restitution, 
because the participant did not receive the payments from the plan 
through fraud or wrongdoing. 197 F.3d at 1006-1007. The court rejected 
the argument that Cement Masons was distinguishable from Owens 
because the plan in Cement Masons established an automatic lien on any 
third-party recovery. The court held that the plan’s request for declara- 
tory and injunctive relief regarding the propriety of enforcing the lien was 

10 

SUMMARY OF ARGUMENT 

A. A civil action constitutes an action for “appropriate 
equitable relief ” within the meaning of Section 502(a)(3) of 
the Employee Retirement Income Security Act of 1974 
(ERISA), 29 U.S.C. 1132(a)(3), when it seeks to redress a 
violation of, or to enforce, a term of an ERISA plan that 
requires a participant or beneficiary to reimburse the plan 
out of a recovery from a third-party tortfeasor. The court of 
appeals erred in characterizing such an action as one seeking 
money damages for a breach of contract, which constitute 
legal relief not available under Section 502(a)(3). That char- 
acterization disregards both the strong support in traditional 
equitable principles for requiring such relief, and this Court’s 
holding that the common law of trusts provides a “starting 
point for analysis [of ERISA] . . . [unless] it is inconsistent 
with the language of the statute, its structure, or its 
purposes.” Harris Trust & Sav. Bank v. Salomon Smith 
Barney Inc., 530 U.S. 238, 250 (2000) (quoting Hughes 
Aircraft Co. v. Jacobson, 525 U.S. 432, 447 (1999)). 

Consistent with those principles, an action to enforce a 
reimbursement term of a plan is properly viewed as an 
action for equitable relief because it seeks to prevent unjust 
enrichment of the participant or beneficiary and because the 
relief is measured by the unjust gain to the defendant, not by 
the loss to the plan. Such a reimbursement action is analo- 

nothing more than a request for “a mechanism to enforce, or to obtain the 
equivalent of, a damage remedy.” Id. at 1007. 

In Ellis, the Ninth Circuit again reaffirmed Owens, rejecting the 
Eleventh Circuit’s view that Owens was “based on an ‘unduly narrow 
reading of Mertens.’ ” 202 F.3d at 1248 (quoting Blue Cross & Blue Shield 

v. Sanders, 138 F.3d 1347, 1353 n.5 (11th Cir. 1998)). The Ninth Circuit 
reasoned that Owens does not conflict with Mertens because Owens does 
not bar all claims for monetary relief under Section 502(a)(3) and 
recognizes that restitution and constructive trusts may be appropriate, 
“provided some fraud or wrong-doing is shown.” Id. at 1249. 

11 

gous to a traditional suit in equity to enforce an agreement 
by a beneficiary to pay money into a trust, or to obtain 
repayment from a beneficiary of an advance made from a 
trust. 

B. In Mertens v. Hewitt Associates, 508 U.S. 248 (1993), 
the Court held that “appropriate equitable relief ” under Sec- 
tion 502(a)(3) means “those categories of relief that were 
typically available in equity (such as injunction, mandamus, 
and restitution, but not compensatory damages).” Id. at 256. 
Equity typically provided a variety of remedies to prevent 
unjust enrichment, including restitution, constructive trust, 
equitable lien, subrogation, and specific performance. A 
court sitting in equity has the flexibility to choose which of 
those types of relief is most appropriate in the circumstances 
of the particular case. 

C. The Ninth Circuit is wrong in believing that Mertens 
limits the availability of restitution and constructive trusts 
in actions under Section 502(a)(3) to cases involving fraud or 
other wrongdoing. Under the court of appeals’ view, the 
reimbursement terms of an ERISA plan cannot be enforced 
under Section 502(a)(3) because the participant or benefici- 
ary was authorized to receive payment from the plan as an 
initial matter. But the Mertens Court referred to the 
availability of “restitution of ill-gotten plan assets or profits” 
merely as an example of “appropriate equitable relief ” under 
Section 502(a)(5); the Court did not purport to limit restitu- 
tion to those circumstances. 508 U.S. at 260. Indeed, else- 
where in Mertens the Court explained, without further 
limitation, that “equitable relief ” under Section 502(a)(3) 
means “those categories of relief that were typically avail- 
able in equity (such as injunction, mandamus, and restitu- 
tion, but not compensatory damages).” Id. at 256 (emphasis 
omitted). Under well-established principles of equity, 
wrongdoing is not an essential element of a claim for 

12 

restitution or a constructive trust, as the Court recently 
confirmed in Harris Trust, 530 U.S. at 251. 

ARGUMENT 

AN ACTION MAY BE BROUGHT UNDER SECTION 
502(a)(3) OF ERISA TO ENFORCE OR REDRESS A 
VIOLATION OF AN ERISA PLAN TERM THAT 

REQUIRES A PARTICIPANT OR BENEFICIARY TO 
REIMBURSE THE PLAN FOR MEDICAL EXPENSES 
RECOVERED FROM A THIRD PARTY 

Section 502(a)(3) of ERISA provides, inter alia, that a 
fiduciary of a plan governed by ERISA may bring a civil 
action “to enjoin any act or practice which violates * * * 
the terms of the plan,” and “to obtain other appropriate 
equitable relief * * * to redress such violations or * * * to 
enforce * * * the terms of the plan.” 29 U.S.C. 1132(a)(3).9 
In Mertens v. Hewitt Associates, 508 U.S. 248 (1993), the 
Court held that, for purposes of Section 502(a)(3), “equitable 
relief ” does not mean whatever relief could have been pro- 
vided in a case by a court in equity, because that category 
would include remedies that are traditionally legal, but that 
an equity court could grant in certain circumstances. Id. at 
256-257. Rather, the Court held that the term “equitable 
relief,” as used in Section 502(a)(3), means “those categories 
of relief that were typically available in equity (such as 

9 Section 502(a)(3) authorizes suits by “a participant, beneficiary, or 
fiduciary.” 29 U.S.C. 1132(a)(3). Petitioners alleged in their first amended 
complaint that petitioner Earth Systems is the plan administrator and, as 
such, is authorized to bring the action under Section 502(a)(3). J.A. 89. 
We agree that Earth Systems, as the plan administrator, is a fiduciary of 
the plan, see 29 U.S.C. 1002(21)(A), and, thus, authorized to bring an 
action under Section 502(a)(3). The Court need not determine the status 
of the other petitioners or their authority to sue under Section 502(a)(3). 
See Health Cost Controls of Ill., Inc. v. Washington, 187 F.3d 703 (7th Cir. 
1999) (Posner, C.J.) (holding that the assignee of a plan may sue under 
section 502(a)(3)), cert. denied, 528 U.S. 1136 (2000). 

13 

injunction, mandamus, and restitution, but not compensatory 
damages).” Id. at 256. The Court stated, for example, that, 
under Section 502(a)(3), a defendant “may be enjoined from 
participating in a fiduciary’s breaches, compelled to make 
restitution, and subjected to other equitable decrees.” Id. at 
262. 

In their first amended complaint, petitioners sought relief 
that is typically available in equity, including an injunction to 
enforce the terms of the plan that expressly provide for 
reimbursement, to prevent respondents from violating those 
terms, to require respondents to reimburse the plan in “the 
amount of $411,157.11 out of any proceeds they recovered 
from third parties,” and to prevent respondents from dis- 
posing of any funds received pursuant to settlement of their 
claims against third parties. J.A. 92, 94-95. They also sought 
“any other relief ” to which they are entitled. J.A. 95. Peti- 
tioners’ suit thus comes within the plain meaning of Section 
502(a)(3) as a suit to enjoin an act that violates the terms of a 
plan, and to obtain other “appropriate equitable relief ” to 
redress such a violation and to enforce the terms of a plan. 

The Ninth Circuit’s contrary conclusion was based on its 
view that reimbursement of funds to a plan out of payments 
made to a participant or beneficiary by a third party is not 
equitable relief. Pet. App. A3-A4. That conclusion rests on 
two faulty premises. First, the Ninth Circuit believed that 
an action to enforce a reimbursement term of a plan is a suit 
seeking “money damages” for a breach of contract, a form of 
legal relief that is not available under Section 502(a)(3). 
Owens, 122 F.3d at 1261-1262; Cement Masons, 197 F.3d at 
1006-1007. Second, the Ninth Circuit believed that equitable 
relief in the form of restitution or a constructive trust is not 
available in actions to enforce a reimbursement term of a 
plan because the plan participant or beneficiary from whom 
reimbursement is sought did not obtain the plan funds in the 

14 

first instance through fraud or other wrongdoing. Ibid. 
Both of those premises are contrary to this Court’s prece- 
dents and must be rejected to ensure proper enforcement of 
ERISA plans. 

A. A Suit To Enforce A Reimbursement Term Of An 

ERISA Plan Constitutes An Action For Appropriate 
Equitable Relief, Not Money Damages, Because It 
Seeks To Prevent Unjust Enrichment 

1. An action to enforce a term of an ERISA plan that 
requires a participant or beneficiary to reimburse the plan 
for expenses recovered from a third party is an action to 
prevent the participant or beneficiary from being unjustly 
enriched. When a plan expressly conditions the payment of 
medical benefits on subsequent reimbursement to the plan 
out of funds recovered by the participant or beneficiary from 
a third-party tortfeasor, the participant or beneficiary is 
unjustly enriched when he or she retains the amount 
recovered from a third party and does not reimburse the 
plan. An action to enforce such a reimbursement term is 
properly brought as an equitable action to prevent unjust 
enrichment through that double recovery. Restatement of 
Restitution § 1, at 12-15 (1937). 

The relief sought in an action to remedy unjust enrich- 
ment is measured by the unjust gain to the defendant, not by 
the harm to the plaintiff. Consistent with that theory of 
recovery, petitioners sought reimbursement from respon- 
dents in “the amount of $411,157.11 out of any proceeds they 
recovered from third parties.” J.A. 92 (emphasis added). 

10 

10 The district court concluded that the plan and the right-of-recovery 
agreement differed regarding the scope of reimbursement required. See 
note 6, supra. The court of appeals did not address that ruling and related 
questions regarding the proper interpretation of the plan, the meaning 
and validity of the right-of-recovery agreement, and the effect of the 
state-court judgment. Those issues may properly be considered by the 
court of appeals on remand. 

15 

Moreover, unlike an award of money damages, which 
“substitutes money for the original condition or thing to 
which the plaintiff was entitled,” the reimbursement sought 
here would give petitioners the very thing to which they are 
entitled under the terms of the plan. 1 D. Dobbs, Law of 
Remedies § 3.1, at 279-280 (2d ed. 1993). A judicial order 
requiring respondents to reimburse the plan in accordance 
with the plan terms is the sort of relief that is typically 
available in equity because it would compel specific perform- 
ance of an obligation to pay money. Indeed, it would compel 
reimbursement of payments that were previously made by 
the plan on the express condition that reimbursement would 
be required if the participant or beneficiary recovered from a 
third party. 

If a beneficiary’s recovery from a third-party is less than 
the total expenses paid by the plan, the plan may not obtain 
reimbursement in excess of the third-party recovery. And 
the plan may not recover damages to compensate the plan 
for the loss of the use of the funds between the time it paid 
the medical benefits on behalf of the beneficiary and the 
latter’s recovery from the third party. Petitioners’ action 
thus seeks merely to restore the status quo and to prevent 
unjust enrichment to the extent of respondents’ recovery 
from the third party. Cf. Tull v. United States, 481 U.S. 412, 
422 (1987). If equitable reimbursement is ordered in these 
circumstances, respondents will not lose anything to which 
they are entitled under the terms of the plan, and the plan 
will not gain anything to which it is not entitled under the 
terms of the plan. 

2. Petitioners’ suit is not an action for contract damages, 
as the court of appeals would have it. See Pet. App. A3-A4; 
Owens, 122 F.3d at 1262. That characterization of the suit 
disregards the background of trust law against which 
ERISA plans are established and instead treats the parties’ 

16 

11 An 
ERISA plan, like an ordinary trust, is not merely one type of 
contract. G. Bogert & G. Bogert, The Law of Trusts and 
Trustees § 17, at 215-216 (rev. 2d ed. 1984); cf. Chauffeurs 
Local No. 391 v. Terry, 494 U.S. 558, 568 (1990) (“ The nature 
of an action is in large part controlled by the nature of the 
underlying relationship between the parties.”). In particu- 
lar, the assumption of fiduciary duties under an ERISA plan 
is analogous to the assumption of such duties under an 
ordinary trust, which is based not on contract, “but rather on 
the effect of a conveyance” that confers upon beneficiaries an 
equitable interest in the trust res. G. Bogert & G. Bogert, 
supra, § 17, at 215-216. 

relationship as a garden-variety, arms’-length contract. 

12 

Some ERISA plans do not provide for a formal trust 
account. For example, employee welfare benefit plans, such 
as the plan in this case, are exempt from ERISA’s minimum 

11 Of course, for the reasons already discussed, even in the case of an 
ordinary contract, an equitable action will lie to prevent unjust enrichment 
and to compel specific performance of an obligation to pay money. 

12 Although employers typically contribute the bulk of the funds for 
ERISA health plans, the employees who participate in and are benefi- 
ciaries of the plan often contribute substantial amounts as well. 
Employees of small firms pay on average 33% of health plan premiums, 
while employees in large firms pay 22%. See Pet. at 6-7, Reynolds Metals 
Co. v. Ellis, supra (No. 99-1787) (citing Private Health Insur- 
ance—Impact of Premium Increases on Number of Covered Individuals 
Is Uncertain: 
Hearings Before the Subcomm. on Employer-Employee 

Relations of the House Comm. on Education and the Workforce, 106th 
Cong., 1st Sess. (1999) (statement of William J. Scanlon, Director, Health 
Financing and Public Health Issues, General Accounting Office)). In 
addition, employer-funded plans can arise by virtue of collective bargain- 
ing agreements, in which, presumably, employee-beneficiaries expressly 
trade off other benefits, such as higher wages, for medical insurance. The 
beneficiaries contribute in that way as well, albeit indirectly. See Central 
States Mot. for Leave to File Amicus Curiae Br. in Support of Pet. 1. 
Indeed, benefits under an ERISA health plan may generally be considered 
an example of compensation in lieu of salary because they are part of an 
employee’s overall compensation package. 

17 

funding standards, see 29 U.S.C. 1081(a)(1), and do not 
generally establish trust accounts, although if the plan 
receives contributions from participants or beneficiaries, it 
must segregate such plan assets from the employer’s general 
assets, 29 C.F.R. 2510.3-102. The Court has made clear, 
however, that the type of plan involved in a particular case 
does not alter the analysis under ERISA where the statu- 
tory text does not distinguish between different types of 
plans. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 
101, 105, 111 (1989) (Court guided by principles of trust law 
in case involving employee welfare benefit plan for which 
separate trust fund had not been established); Hughes Air- 
craft Co. v. Jacobson, 525 U.S. 432, 443-444 (1999) (plan 
sponsors who alter the terms of a plan are not fiduciaries, 
and “are analogous to the settlors of a trust,” regardless of 
whether the plan is a pension benefit plan, a welfare benefit 
plan, a contributory plan, a noncontributory plan, or “any 
other type of plan”) (citation omitted). 

This Court has repeatedly held that the common law of 
trusts provides a “starting point for analysis [of ERISA] 

. . . [unless] it is inconsistent with the language of the 
statute, its structure, or its purposes.” Harris Trust & Sav. 
Bank v. Salomon Smith Barney Inc., 530 U.S. 238, 250 
(2000) (quoting Hughes Aircraft Co., 525 U.S. at 447); see 
also Firestone Tire & Rubber Co., 489 U.S. at 110-111. Ref- 
erence to the common law of trusts in this case demonstrates 
the appropriateness of several equitable remedies in a case 
such as this. 

As beneficiaries of an ERISA plan, respondents owe 
various duties to the plan, and they would owe duties to 
other beneficiaries under established common-law trust 
principles. “Co-beneficiaries are owners of equitable 
interests in the same res * * * . They are in a fiduciary 
relation to each other in the sense that one beneficiary may 
not secretly secure for himself a special advantage in the 

18 

trust administration.” G. Bogert & G. Bogert, supra, § 191, 
at 478 (1979); see also Restatement (Second) of Trusts §§ 
251-255, at 633-642 (1959) (describing duties and liabilities of 
beneficiary to trust); 3A A. Scott & W. Fratcher, The Law of 
Trusts §§ 250-254, at 358-378 (4th ed. 1988) (same). 

Moreover, suits could typically be brought in equity to 
enforce an agreement by a beneficiary to pay money into a 
trust. 3A A. Scott & W. Fratcher, supra, § 252, at 366; 
Restatement (Second) of Trusts, supra, § 252, at 635-636. 
An action likewise could be brought in equity against a 
beneficiary for instigating a breach of trust and to restore 
payments improperly made to the beneficiary from the trust. 
G. Bogert & G. Bogert, supra, § 191, at 478-485; 3A A. Scott 
& W. Fratcher, supra, §§ 253-254.2, at 368- 378; Restatement 
(Second) of Trusts, supra, §§ 253-254, at 636-640. And an 
equitable action was available against a beneficiary for 
repayment of an advance made by the trust. Id. § 255, at 
640-642. See generally 3A A. Scott & W. Fratcher, supra, 
§§ 251, 252, at 363, 366 (A beneficiary may be liable to the 
trust estate based on the broad equitable principle that “a 
person entitled to participate in a fund and also bound to 
contribute to the same fund cannot receive the benefit with- 
out discharging the obligation.”). 

An action to enforce the reimbursement terms of an 
ERISA plan in order to prevent unjust enrichment of a 
participant or beneficiary fits comfortably within the scope 
of those traditional claims in equity. Such an action is 
analogous to both an action to enforce an agreement by the 
beneficiary to pay money into the trust, and an action for 
repayment of an advance made from the trust. Like those 
actions, reimbursement pursuant to the terms of an ERISA 
plan furthers the underlying trust objectives and enhances 
the functioning of the plan by providing specified benefits to 
all employees and their dependents, while also containing 
costs and preserving the plan assets to satisfy further 

19 

claims. Mertens, 508 U.S. at 262-263; Varity Corp. v. Howe, 
516 U.S. 489, 514 (1996). 

B. “Equitable Relief ” Includes An Order To Prevent 

Unjust Enrichment Resulting From A Participant’s Or 
Beneficiary’s Failure To Abide By A Reimbursement 
Term Of An ERISA Plan. 

1. Petitioners’ action for reimbursement seeks equitable 
relief within the meaning of Section 502(a)(3) notwith- 
standing that it would, if successful, result in an order for 
payment of money. This Court has expressly recognized 
that an award of monetary relief is not necessarily legal 
relief. In Chauffeurs Local No. 391, the Court explained, for 
example, that monetary relief is equitable where it is 
“restitutionary, such as in ‘action[s] for disgorgement of 
improper profits,’ ” 494 U.S. at 570 (quoting Tull, 481 U.S. at 
424), and where it is “incidental to or intertwined with 
injunctive relief,” id. at 571 (quoting Tull, 481 U.S. at 424); 
see also Harris Trust, 530 U.S. at 240 (discussed at pp. 29-30, 
infra); Curtis v. Loether, 415 U.S. 189, 197 (1974); Porter v. 
Warner Holding Co., 328 U.S. 395, 402 (1946). And the 
Court also has held in other circumstances that a suit for 
monetary reimbursement may be considered to be one for 
“specific relief ” rather than “money damages.” See Bowen v. 
Massachusetts, 487 U.S. 879, 893-896, 899-901 (1988). 

13 

13 In Bowen v. Massachusetts, the Court held that the provision of the 
Administrative Procedure Act that precludes actions against federal 
agencies seeking “money damages” (see 5 U.S.C. 702) does not bar a 
district court action by a State seeking review of a decision by the 
Department of Health and Human Services denying reimbursement for 
certain expenditures under the State’s Medicaid program. The Court held 
that the State’s request for monetary relief was in the nature of an 
equitable action for specific relief to obtain money to which the State 
allegedly was entitled under the federal Medicaid statute. See also 
Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 262 (1999) 
(“Bowen’s interpretation of § 702 thus hinged on the distinction between 
specific relief and substitute relief, not between equitable and nonequi- 

20 

As we explain below, restitution and specific relief are but 
two of a number of remedies typically available in equity 
that may be appropriate in an action under Section 502(a)(3) 
of ERISA to enforce a term of a plan providing for reim- 
bursement to the plan out of a third-party recovery. 
Whether the appropriate remedy in any particular case is 
restitution, specific relief, or another form of equitable relief 
may depend on the circumstances of that case. Flexibility in 
determining the nature of the relief that is appropriate in a 
given case is characteristic of suits in equity. Accordingly, 
courts entering an equitable judgment “may vary, qualify, 
restrain, and model the remedy so as to suit it to mutual and 
adverse claims, controlling equities, and the real and sub- 
stantial rights of all the parties.” 1 J. Story, Equity 
Jurisprudence § 28, at 24 (14th ed. 1918); see, e.g., Albemarle 
Paper Co. v. Moody, 422 U.S. 405, 415-417 (1975). 

Moreover, because of the expansive preemption provi- 
sions of ERISA, which supersede state laws that relate to 
covered employee benefit plans (29 U.S.C. 1144(a); see 
Egelhoff v. Egelhoff, 121 S. Ct. 1322 (2001)), a cause of action 
presumably would not lie against a participant or beneficiary 
under state law to enforce a reimbursement term of a plan. 
Compare FMC v. Holliday, 498 U.S. 52 (1980) (ERISA 
preempts state law precluding self-funded employee welfare 
benefit plans from exercising rights under plan provisions 
requiring member to reimburse plan if member recovers 
from third-party tortfeasor). An action under Section 
502(a)(3) therefore is likely to be the only avenue of relief for 
a plan fiduciary. Thus, adoption of the Ninth Circuit’s 
view—that Section 502(a)(3) is not available to enforce such 
a reimbursement term—could render such a plan term 

table categories of remedies.”). Although Bowen and Blue Fox addressed 
a distinct question concerning the meaning of “money damages” in 5 
U.S.C. 702, those cases are instructive insofar as they recognize that some 
actions for monetary relief are suits for “equitable” relief. 

21 

altogether unenforceable, contrary to the purposes of 
ERISA. 

2. Consistent with the principles set forth above, the 
courts of appeals have recognized various types of equitable 
relief in actions under ERISA plans that provide for 
reimbursement to the plan out of a third-party recovery, 
recognizing that, whatever remedy is used to afford relief, 
the plan fiduciary is “seeking an equitable remedy against 
[the participant or beneficiary] to ensure her compliance 
with the terms of the Plan.” Administrative Comm. v. Gauf, 
188 F.3d 767, 770 (7th Cir. 1999) (citing as examples the 
fiduciary plaintiff ’s request for “ ‘specific performance and 
enforcement’ of the contract and an ‘order enjoining [the 
participant] from continuing to violate the terms of the 
plan’ ”). 

14 Providing appropriate equitable relief to plan 
fiduciaries to enforce reimbursement terms of ERISA plans 
helps to maintain plan assets for the benefit of all beneficiar- 
ies, and furthers one of the stated purposes of ERISA—that 
of “providing for appropriate remedies, sanctions, and ready 
access to the Federal courts.” 29 U.S.C. 1001(b). See also 
Varity Corp., 516 U.S. at 512 (characterizing Section 
502(a)(3) as a “safety net, offering appropriate equitable 
relief for injuries caused by violations that § 502 does not 
elsewhere adequately remedy”). 

14 ERISA plans attach different labels to the right of the plan to rec- 
over previously-made payments out of a third-party recovery received by 
a participant or beneficiary, and sometimes use differing terms inter- 
changeably. See 16 L. Russ, Couch on Insurance § 226:1, at 226-11, 
§ 226:4, at 226-15 to 226-17 (3d ed. 2000); see also id. § 222:2, at 222-11 to 
222-12 (“The right of an insurer to recover payments made pursuant to its 
policy from a third party which caused the loss, or from the person to 
whom the payment was made, generates considerable confusion because 
of overlap between, and misuse of , ” the terms “subrogation,” “recoup- 
ment,” “restitution,” reimbursement,” and “recovery.”); id. § 222.22, at 
222-13 to 222-14 (noting distinctions among subrogation, liens, and 
assignments). 

22 

a. An action for reimbursement to prevent unjust enrich- 
ment may properly be brought as an equitable action seeking 
restitution. See Restatement of Restitution, supra, § 1, at 
12-15 (restitution is an appropriate equitable remedy to 
prevent unjust enrichment); 1 D. Dobbs, supra, § 4.1(1), at 
552, 556 (same). “Restitution is limited to ‘restoring the 
status quo and ordering the return of that which rightfully 
belongs to the purchaser or tenant.’ ” Tull, 481 U.S. at 424 
(quoting Porter, 328 U.S. at 402). Restitution to prevent 
unjust enrichment, which is measured by the defendant’s 
gain, not the plaintiff ’s loss, differs in “goal or principle from 
damages, which measures the remedy by the plaintiff ’s loss 
and seeks to provide compensation for that loss.” 1 D. 
Dobbs, supra, § 4.1(1), at 555; Restatement of Restitution, 
supra, § 1, cmt. e at 14. 

15 

In Harris Trust, this Court held that restitution is avail- 
able under Section 502(a)(3) to remedy violations of Title I of 
ERISA. 530 U.S. at 243, 250-251, 253 (restitution available 
against nonfiduciary party in interest who participated in 
prohibited transaction). Because Section 502(a)(3) affords 
the same relief for violations of a plan as it does for violations 
of the Act itself, restitution should likewise be available here 
to enforce a reimbursement term of the plan. Here, of 
course, petitioners seek restitution from a beneficiary who is 
retaining funds in contravention of the terms of the plan, 
even though there was no violation of the plan when the 
funds were first advanced to the beneficiary. The Seventh 
Circuit has specifically held that a suit for restitution in 
comparable circumstances is an action for “appropriate 

15 Although restitution may be viewed as a legal remedy when 
awarded in an action at law, it is properly viewed as equitable relief 
where, as here, it is sought in a traditional action in equity to prevent 
unjust enrichment. See Reich v. Continental Cas. Co., 33 F.3d 754, 755- 
756 (7th Cir. 1994) (Posner, C.J.), cert. denied, 513 U.S. 1152 (1995). See 
also Washington, 187 F.3d at 710. 

23 

equitable relief ” under Section 502(a)(3), see Harris Trust & 
Sav. Bank v. Provident Life & Accident Ins. Co., 57 F.3d 
608, 615 (1995), and the Fourth Circuit has expressed a simi- 
lar view, see Provident Life & Accident Ins. Co. v. Waller, 
906 F.2d 985, 988 n.5, cert. denied, 498 U.S. 982 (1990). 
Those courts articulated similar standards for establishing 
an entitlement to restitution and determined that the plan’s 
reimbursement claim before them easily sufficed. 

16 As the 
Fourth Circuit put it, “the facts of the instant case fit the 
archetypal unjust enrichment scenario. * * * [T]he result 
in this case is an inequitable one; the record indicates [the 
beneficiary] received a double recovery despite knowing 
about the plan’s reimbursement provision.” Id. at 993. 

b. A constructive trust is another appropriate equitable 
remedy in an action under Section 502(a)(3) of ERISA 
seeking reimbursement out of a third-party recovery. This 
Court described that remedy in Harris Trust: “Whenever 
the legal title to property is obtained through means or 
under circumstances ‘which render it unconscientious for the 
holder of the legal title to retain and enjoy the beneficial 
interest, equity impresses a constructive trust on the prop- 
erty thus acquired in favor of the one who is truly and 
equitably entitled to the same, although he may never, 
perhaps, have had any legal estate therein.’ ” 
530 U.S. at 

250-251 (quoting Moore v. Crawford, 130 U.S. 122, 128 
(1889), and 4 J. Pomeroy, Equity Jurisprudence § 1053, at 

16 Although the Fourth Circuit in Waller found a cause of action for 
restitution under federal common law, and did not rest its decision on 
Section 502(a)(3) (see 906 F.2d at 988 n.5, 992-994), it, like the Seventh 
Circuit in Harris Trust & Savings Bank v. Provident Life & Accident 
Insurance Co., looked to the elements of restitution as described by 
Professor Corbin: (1) the plaintiffs had a reasonable expectation of pay- 
ment; (2) the defendants should reasonably have expected to pay, and (3) 
society’s reasonable expectations of person and property would be 
defeated by nonpayment. See 906 F.2d at 993-994, and 57 F.3d at 615 
(both citing C. Kaufman, Corbin on Contracts § 19A, at 50 (Supp. 1989)). 

24 

119-120 (5th ed. 1941)); accord, e.g., Restatement of Restitu- 
tion, supra, § 160, at 640; 1 D. Dobbs, supra, § 4.3(1), at 587. 
ERISA’s legislative history specifically identifies a construc- 
tive trust as an example of “appropriate equitable relief.” 
S. Rep. No. 383, 93d Cong., 1st Sess. 105 (1973) (“Appropri- 
ate equitable relief may be granted in a civil action. For 
example, injunctions may be granted to prevent a violation 
of fiduciary duty, and a constructive trust may be imposed 
on the plan assets, if needed to protect the participants and 
beneficiaries.”). Consistent with that congressional intent, 
the Seventh Circuit has correctly held that an action by a 
plan administrator against a beneficiary for reimbursement 
of medical benefits as called for by the plan may properly be 
treated as an action to impose a constructive trust on funds 
the beneficiary received from a third party, and thus con- 
stitutes an action for appropriate equitable relief under Sec- 
tion 502(a)(3). Health Cost Controls of Ill., Inc. v. Washing- 
ton, 187 F.3d 703, 710-711 (1999) (Posner, C.J.), cert. denied, 
528 U.S. 1136 (2000). 

c. Claims such as petitioners’ may also properly be char- 
acterized as actions “seeking to impose an equitable lien on 
the [funds received from a third party] or seeking a manda- 
tory injunction directing [the participant or beneficiary] to 
sign over her claim to the money.” Washington, 187 F.3d at 
711. An equitable lien is another equitable remedy intended 
to prevent unjust enrichment and may arise out of an 
express agreement or may be judicially implied. 1 D. Dobbs, 
supra, § 4.3(3), at 601; G. Bogert & G. Bogert, supra, § 32, at 
395-401; see also Department of the Army v. Blue Fox, Inc., 
525 U.S. 255, 264-265 (1999) (recognizing propriety of 
imposing an equitable lien to obtain a security interest in 
property that the plaintiff may then use to satisfy a claim for 
unjust enrichment). An equitable lien is imposed and 
operates like a constructive trust, the difference being that 
the equitable lien provides a security interest in, rather than 

25 

complete title to, the property to which it attaches. 1 D. 
Dobbs, supra, § 4.3(3), at 601; G. Bogert & G. Bogert, supra, 
§ 32, at 395-401; Restatement of Restitution, supra, § 161, at 
650. In this case, no implication of an equitable lien is 
necessary, because the SPD (see note 2, supra) expressly 
provided that the plan would “have a first lien upon any 
recovery, whether by settlement, judgment or otherwise,” 
that a beneficiary received from a third party. J.A. 58. 

17 

d. Finally, another obvious equitable remedy that may be 
appropriate in an action to enforce a reimbursement term of 
an ERISA plan is specific performance, ordered through a 
mandatory injunction. A suit for an injunction to compel 
performance of a plan term is plainly authorized by Section 
502(a)(3), because it is “[a] civil action * * * brought * * * 
to enjoin any act or practice which violates * * * the terms 

17 In addition, in this case, respondent Eric Knudson agreed in the 
right-of-recovery agreement “that the plan may be subrogated to me or 
my dependent’s rights for any benefits from the other party.” J.A. 77. 
Subrogation is an equitable remedy, Restatement of Restitution, supra, 
§ 162, at 653; 1 D. Dobbs, supra, § 4.3(4), at 605-606; G. Bogert & G. 
Bogert, supra, § 33, at 401, and is “an established branch of equity juris- 
prudence,” 16 L. Russ, supra, § 222:24, at 222-52. At its core, subrogation 
is intended to prevent unjust enrichment. The question of when an 
insurer is entitled to subrogation or how much it should receive are 
questions of equity, even when the subrogation is expressly delineated in 
an insurance policy. Id. § 222:39, at 222-75; see also id. §§ 222:8, 222:9, at 
222-30 to 222-34; id. § 222:20, at 222-47; § 222:28, at 222-61 to 222-63; see 
generally Restatement of Restitution, supra, § 162, at 653. 

Although subrogation and reimbursement differ procedurally—in the 
former, the insurer stands in the insured’s shoes against the third-party 
tortfeasor, while in the latter, it proceeds against the insured and only if 
the insured obtains a third-party recovery (see L. Russ, supra, § 226:1, at 
226-10 to 226-12)—both have similar justifications (to prevent unjust 
enrichment) and substantive effects (preventing double recovery). Cf. 
Stillmunkes v. Hy-Vee Employee Benefit Plan & Trust, 127 F.3d 767, 770 
(8th Cir. 1997) (state subrogation law covers claim under plan reimburse- 
ment clause, but is preempted by ERISA); FMC Corp. v. Holliday, supra 
(ERISA preempts application of state anti-subrogation and reimburse- 
ment statute to reimbursement provision of self-funded ERISA plan). 

26 

of the plan, or * * * to obtain other appropriate equitable 
relief * * * to enforce * * * the terms of the plan.” 
29 U.S.C. 1132(a)(3). 

Unlike the other equitable remedies discussed above, spe- 
cific performance arises from the parties’ contractual rela- 
tionship. See 4 J. Pomeroy, supra, § 1401, at 1033; Restate- 
ment (Second) of Contracts, at 162 (1981) (“Topic 3. Enforce- 
ment by Specific Performance and Injunction, Introductory 
Note”); id. § 357, cmts. a, c at 163, 165. The remedy is 
“drawn as best to effectuate the purposes for which the con- 
tract was made and on such terms as justice requires.” Id. § 
358(1), at 166; see also id. § 358, cmt. a, c at 166, 167-168 
(court, acting in equity “to do complete justice,” has consid- 
erable discretion and flexibility in molding relief ); id. § 364, 
at 184 (describing types of unfairness precluding specific 
performance). 

If adequate money damages were available here in an 
action at law, specific performance relief might be foreclosed. 
Raton Water Works Co. v. Raton, 174 U.S. 360 (1899); 
Restatement (Second) of Contracts, supra, § 360, cmt. a at 
171 (specific performance not ordered where damages are 
adequate to protect party’s “expectation interest”). Mer- 
tens, however, precludes the recovery of money damages 
against non-fiduciaries under Section 503(a)(3). Thus money 
damages are not available at law, and therefore an injunction 
ordering specific performance of the reimbursement clause is 
“appropriate equitable relief ” under Section 502(a)(3). See 
Blue Cross & Blue Shield v. Sanders, 138 F.3d 1347, 1352 n.5 
(11th Cir. 1998); see also 4 J. Pomeroy, supra, § 1403, at 1039 
(specific performance available where no action at law may 
be maintained on the contract); Restatement (Second) of 
Contracts, supra, § 359(1) and (3), cmt. c at 169, 170 (specific 
performance will not be refused even if other remedies, such 
as restitution, are available). 

27 

C. The Absence of Wrongdoing By Respondents In The 

Initial Receipt Of Benefits Does Not Foreclose 
Equitable Relief To Require Reimbursement 

The Ninth Circuit erroneously interpreted Mertens to 
limit the availability of restitution and the imposition of a 
constructive trust in actions under Section 502(a)(3) of 
ERISA to cases involving fraud or other wrongdoing in the 
initial receipt of payments from the plan. Ellis, 202 F.3d at 
1248, 1249; Cement Masons, 197 F.3d at 1006-1007; Owens, 
122 F.3d at 1261. Under that view, an action to enforce a 
plan term providing for reimbursement to the plan of funds 
recovered from a third party would never support an award 
of restitution or constructive trust because, by definition, the 
participant or beneficiary was authorized by the terms of the 
plan to receive the payment from the plan in the first 
instance. 

A lack of wrongdoing by the participant or beneficiary in 
receiving the plan’s payment of benefits in the first instance 
does not, however, render restitution or a constructive trust 
inappropriate in an action to enforce a reimbursement pro- 
vision. First, the retention of funds received from the third- 
party tortfeasor by the participant or beneficiary despite his 
knowledge of the reimbursement obligation constitutes the 
wrongful retention of the funds, whether or not the initial 
receipt of the payments from the plan was lawful. See G. 
Bogert & G. Bogert, supra, § 471, at 26-29 (1978) (“Wherever 
equity finds * * * a wrongful holding it will give relief, 
whether the type of injustice is new or old. The court does 
not restrict itself by describing all the specific forms of 
inequitable holding which will move it to grant relief, but 
rather reserves freedom to apply this remedy to whatever 
knavery human ingenuity can invent.”). 

Second, even if the refusal by a participant or beneficiary 
to comply with an express reimbursement term of a plan 
were not viewed as wrongful holding of the funds, restitution 

28 

and imposition of a constructive trust are still appropriate 
remedies under this Court’s precedents. The Ninth Circuit 
rested its contrary interpretation of Mertens on a statement 
by the Court identifying “the return of ‘ill-gotten’ assets or 
profits taken from a plan” as an example of “appropriate 
equitable relief ” under Section 502(a)(5) of ERISA. 

18 See 
Owens, 122 F.3d at 1261 (quoting Mertens, 508 U.S. at 260); 
Cement Masons, 197 F.3d at 1006-1007. The Mertens Court, 
however, did not purport to limit restitution to such circum- 
stances. 508 U.S. at 260. Indeed, elsewhere in Mertens the 
Court explained, without further limitation, that “equitable 
relief ” under Section 502(a)(3) means “those categories of 
relief that were typically available in equity (such as injunc- 
tion, mandamus, and restitution, but not compensatory dam- 
ages).” Id. at 256 (emphasis omitted). Mertens thus contem- 
plates that equitable remedies, including restitution, may be 
awarded whenever it would be consistent with principles of 
equity to do so. 

Under established principles of equity, wrongdoing is not 
an essential element of a restitution claim. 1 D. Dobbs, 
supra, § 4.1(2), at 559; Restatement (Second) of Contracts, 
supra, § 373, at 208-209. Similarly, no showing of wrong- 
doing or dishonorable conduct by the person having legal 
title to the asset is required in order to recover through a 
constructive trust. Indeed, restitution through imposition of 
a constructive trust is appropriate even where the assets 
were transferred by mistake, because it is a means of 
preventing unjust enrichment. 1 D. Dobbs, supra, § 4.1(2), 
at 559-560; id. § 4.3(2), at 597-598; see also 5 A. Scott & W. 
Fratcher, Scott on Trusts § 462.2, at 313-314 (4th ed. 1989) 

18 Section 502(a)(5), 29 U.S.C. 1132(a)(5), is the parallel statutory provi- 
sion that authorizes civil actions by the Secretary of Labor to redress 
statutory violations. It is worded similarly to Section 502(a)(3), and this 
Court has interpreted it accordingly. See Harris Trust, 530 U.S. at 248- 
249. 

29 

(“A constructive trust may arise, however, even though the 
acquisition of the property was not wrongful. It arises 
where the retention of the property would result in the 
unjust enrichment of the person retaining it.”). 

19 In addition, 
like a constructive trust, an equitable lien is not limited to 
cases of wrongdoing or dishonorable conduct. 1 D. Dobbs, 
supra, § 4.3(3), at 602-603. 

Finally, in Harris Trust, the Court reaffirmed that resti- 
tution and imposition of a constructive trust under Section 
502(a)(3) are governed by common-law remedial principles, 
not notions of wrongdoing. The Court there held that the 
fact that a third party “was not ‘the original wrongdoer’ does 
not insulate him from liability for restitution” to a plan of 
trust property transferred to him in breach of a trustee’s 
fiduciary duty. 530 U.S. at 251. 

20 And as the Court also 
noted, a constructive trust likewise “is based on property, 
not wrongs.” Ibid. (quoting 1 D. Dobbs, supra, § 4.3(2), at 
597); Restatement of Restitution, supra, § 160, cmt. d at 643 
(“a constructive trust is imposed * * * to take from the 
defendant property the retention of which * * * would 
result in * * * unjust enrichment”). A court therefore may 
enter appropriate equitable relief to compel reimbursement 

19 See also 5 A. Scott & W. Fratcher, supra, § 462.2, at 313-314 (4th ed. 
1989 & Supp. 2000) (noting that, under ordinary trust law, the historical 
limitation of a constructive trust as a remedy for breach of trust by 
fiduciaries has been abandoned); 1 D. Dobbs, supra, § 4.3(2), at 597. See 
also Washington, 187 F.3d at 711 (finding no basis “either in ERISA or in 
the principles of equity” for limiting “the imposition of a constructive trust 
in an ERISA case” to cases where “there has been a breach of trust”); 
accord Wal-Mart Stores, Inc. Assocs.’ Health & Welfare Plan v. Wells, 213 
F.3d 398, 401 (7th Cir.), cert. denied, 121 S. Ct. 441 (2000). 

20 The Court in Harris Trust emphasized that “the common law of 
trusts” limits restitution from “defendants other than the principal 
‘wrongdoer’ ” to instances in which the defendant had actual or construc- 
tive knowledge of the prohibited nature of the transfer. 530 U.S. at 251. 
No comparable concern about knowledge arises in a case such as this, 
because reimbursement is sought pursuant to an express term of the plan. 

30 

to the plan of payments made to a participant or beneficiary 
when reimbursement is required by the terms of the plan. 

CONCLUSION 

The judgment of the court of appeals should be vacated 
and the case remanded to that court for further considera- 
tion consistent with the analysis set forth above. 

Respectfully submitted. 

JUDITH E. KRAMER 

Acting Solicitor of Labor 
ALLEN H. FELDMAN 

Associate Solicitor 
NATHANIEL L. SPILLER 

Deputy Assistant Solicitor 
GARY K. STEARMAN 

Attorney 
Department of Labor 

BARBARA D. UNDERWOOD 

Acting Solicitor General 
EDWIN S. KNEEDLER 

Deputy Solicitor General 
BETH S. BRINKMANN 

Assistant to the Solicitor 

General 

MAY 2001